The pre-CSLR complaints estimate was the first estimate determined by CSLR.

The pre-CSLR estimate, determined a one-off levy that is expected to pay eligible compensation claims from AFCA’s pre-CSLR complaint backlog for the period 1 November 2018 to 7 September 2022.

Under the relevant legislative framework, the ten-largest banking and general/life insurance groups by income from financial year 2021-2022, as reported by the Australian Taxation Office (ATO), funded the pre-CSLR levy.

CSLR claims arising from AFCA complaints lodged on or after 8 September 2022 will be funded through the annual levy framework.

The CSLR Board determined a pre-CSLR complaints estimate of $241 million, which fell within the $250 million pre-CSLR cap under the legislative framework. In making its determination, the CSLR Board took into account the analysis set out in the Finity Consulting report linked above, which was subject to an independent actuarial review by Taylor Fry.

$4.8m

• Funded by the Australian Government.
• This estimate covers eligible compensation claims, AFCA fees, the CSLR operating costs and capital reserve contributions between 2 April 2024 to 30 June 2024.

The Principal Actuary’s initial levy estimate recommendation was $4.8m. A full copy of the report is available to provide transparency of the estimates modelling and assumptions.

Sub-sector breakdown

$24.1m

• Funded by the 4 financial subsectors covered by the CSLR.
• This estimate, following legislative processes, covers eligible compensation claims, AFCA fees, the CSLR operating costs, ASIC administration costs and capital reserve contributions between 1 July 2024 to 30 June 2025.

The Principal Actuary’s initial levy estimate recommendation was $24.1m. A full copy of the report is available to provide transparency of the estimates modelling and assumptions.

Sub-sector breakdown

$77.97m

The CSLR engaged the services of the Principal Actuary to undertake the detailed modelling and analysis, ensuring compliance with legislative requirements and confidence in the estimates. The Principal Actuary’s initial levy estimate recommendation was $77,975,000. A full copy of the report is available to provide transparency of the estimates modelling and assumptions. A summary of the actuaries estimates is outlined below:

• As the initial levy estimate for the financial advice sub-sector exceeds the $20 million cap, ASIC can only issue the annual levy up to $20 million at the sub-sector level.
• The amount above $20 million for the financial advice sub-sector will require funding via a special levy with formal notification of this requirement to be made to the Minister for Financial Services early in FY26. Consistent with the legislation, the CSLR will complete a revised levy estimate for FY26.
• The consideration of any special levy will be determined by the Minister and subject to separate parliamentary approval.

Sub-sector breakdown

$75.698m

With the assistance of CSLR’s principal actuary, the CSLR has revised the initial FY2026 estimate of $77.975m down to $75.698m. Read the full report here.

As the revised estimate for the personal financial advice sub-sector is above the $20m sub-sector cap, ASIC can only issue the annual levy up to $20m as per the legislation. Any funding beyond the $20m sub-sector cap must be sought through a special levy. To initiate this process, the CSLR will notify the Minister for Financial Services of the need for a special levy. The implementation of any special levy will be subject to the Minister’s consideration and will require a separate parliamentary process and approval.

Summary of the revised estimate:

• A special levy for the amount of $47.3m in relation to the personal financial advice sub-sector will be requested by the CSLR.
• The estimate for the securities dealing sub-sector has increased from $2.3m to $4.7m. The increase will be funded by the CSLR’s cash reserves and recovered in the FY27 annual levy for securities dealing.

A detailed sub-sector breakdown can be downloaded here.

Sub-sector breakdown

Data taken from Table 1.2 of the Actuarial Report: Revised Levy Estimate for FY2026 (3rd levy period)

Frequently asked questions

How are the entity amounts calculated for a special levy?

The method for calculating an individual entity’s levy is set out in the Financial Services Compensation Scheme of Last Resort Levy Regulations 2023. The calculation of the leviable amounts under a special levy will also be subject to the decision of the Minister, including whether a levy should be imposed at all, and if so, on which entities it will apply.

How has the revised estimate been calculated?

CSLR Actuarial Policy: The CSLR has adopted and implemented a Policy for Determination of Estimates for the FY2026 levy period.  This policy ensures that the appropriate framework and governance structure have been incorporated into the determination process, which reflects its obligations under the legislation. Independent estimate modelling and report: The CSLR engaged the services of its principal actuary Finity Consulting to undertake the detailed modelling and analysis, ensuring compliance with legislative requirements and confidence in the estimates. The principal actuary’s revised estimate for FY2026 is $75,698,000. A full copy of the report is available to provide transparency of the estimates modelling and assumptions.

What are the next steps?

• CSLR completes a revised levy estimate of claims, fees and costs. The revised estimate can only be registered and tabled after 1 July 2025.
• CSLR notifies the Minister that the revised levy estimate exceeds the $20 million sub-sector cap;
• The Minister has discretion to apply the special levy, including who the levy applies to, the amount of the levy, and the timing of the levy. If the Minister determines a special levy needs to be imposed, a Ministerial instrument will be registered and is subject to a ‘Disallowance period’ of 15 days for each House of Parliament.
• ASIC calculates levy share for each entity based on the legislative requirements and Ministerial determination.
• ASIC issues individual levy notices to each entity.
• ASIC collects the payment on behalf of the Australian Government.
• The Government then provides the funds to the CSLR.

What does this mean for the securities dealing sub-sector?

The estimate for Securities dealing has increased from $2.3m to $4.7m. The increase will be funded by CSLR’s cash reserves, and recovered in the FY2027 annual levy for securities dealing.

$137.5m

The CSLR engaged the services of its principal actuary Finity Consulting, to prepare the estimate in line with the CSLR actuarial policy, ensuring compliance with legislative requirements and confidence in the estimates.

The principal actuary’s initial estimate for FY2027 is $137.5m. The full report can be read here.

Summary of the initial estimate:

As expected, the personal financial advice sub-sector will exceed the $20m sub-sector cap. A revised estimate will be determined towards the end of FY26, allowing for the CSLR to request a Special Levy for the FY2027 period. This request will be made to the Minister after 1 July 2026.

This initial estimate does not include the impact of Shield and First Guardian failures.

Based on the limited information currently available pertaining to the abovementioned firms, the CSLR, alongside its independent actuary, anticipate that the FY2027 Revised Levy Estimate may be higher than this initial figure of $137.5m.

Detailed sub-sector breakdown can be downloaded here.

Sub-sector breakdown

Frequently asked questions

How has the initial estimate been calculated?

CSLR Actuarial Policy: The CSLR has adopted and implemented a Policy for Determination of Estimates for a Levy Period. This policy ensures that the appropriate framework and governance structure are incorporated into the determination process, thereby reflecting its obligations under the legislation.

Principal Actuary Report: The CSLR engaged the services of its principal actuary Finity Consulting, to undertake the detailed modelling and analysis, ensuring compliance with legislative requirements and confidence in the estimates. The principal actuary’s initial estimate for FY2027 is $137.5m.
A full copy of the report is available to provide transparency of the estimates, modelling and assumptions.

What does this estimate look like in comparison to previous estimates?

^a further levy of $2.4m was not sought in FY2026, and this amount has been recovered in the FY2027 initial levy estimate

What is the reason for the FY2026 shortfall in the initial estimate pertaining to the securities dealing sub-sector?

$2.2m has been included in the Initial Estimate for the FY2027 period as CSLR determined it would not seek a Further Levy for the FY2026 Levy Period for this amount.